Real Estate Costs

Today purchasers are faced with the following costs (e.g., in Toronto):

  1. City of Toronto Land Transfer Tax:
    Due on closing, depending on your ownership status
  2. Provincial Land Transfer Tax:
    Due on closing, depending on your ownership status
  3. Harmonized Sales Tax (HST):
    Due on closing if property is a new build and a non-owner occupied investment
  4. Levies:
    Municipal taxes due on closing as an estimate of forecasted service that will cost the municipality

Example: Costs for a below-average real estate purchase in Toronto, Canada

PURCHASE COSTS
  • Purchase Price
  • Down Payment
  • HST Due On Closing
  • Land Transfer Tax(in the municipality of Toronto)
  • Levies
  • Lawyer Fees
  • Total Costs Incurred
  • Total Closing Costs Less HST due on closing
CANADIAN ($)
  • $300,000
  • $60,000
  • $23,400
  • $5,700
  • $5,000
  • $2,000
  • $36,100
  • $12,700
REFUNDABLE PORTION
  • $0
  • $0
  • $23,400
  • $0
  • $0
  • $0
  • ---
  • ---

Thousands of purchasers must come up with the HST component upon closing on a newly built property investment property. Many of them have not taken this expense into account with their initial budget. RealNet estimates 20,000 closings in 2014 alone. The additional expense is incurred if said property is an investment unit and purchased from a builder. HST is 13% of the purchase price and a portion of this is due on closing. The Federal and Provincial government will allow a maximum New Housing Rebate based on a weighted calculation by purchase price. We will qualify investors for the rebate if they meet the loan requirements.

Refunds are normally issued within 8 weeks of the application being filed, but can take up to over a year.